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A Research Service By Business Insider The Future Of Digital: 2014
intelligence.businessinsider.com Tony Danova Senior Research Analyst BI Intelligence
There are now nearly 3 billion people online Source: International Communication Union, Google
Four billion to go Source: International Communication Union, Google
Attention is shifting to digital, especially mobile Source: eMarketer, April 2014
This is a generational shift Source: Ofcom
One law of media…
Money follows eyeballs.
Ad spending is moving to digital (and mobile) Source: IAB, U.S. Census Bureau, Strategy Analytics, BI Intelligence estimates
Print ads have fallen off a cliff Source: Newspaper Association Of America *Estimate
Google is now bigger than all newspapers, magazines Source: Google, NAA, PIB
Google now dwarfs “big media” Source: Company Filings, BI Intelligence estimates
Google is almost half the size of all global TV advertising Source: Google, PWC
For many years TV folks have (rightly) laughed off digital concerns
Time to stop laughing.
Ratings are falling… Source: Nielsen
Pay TV subscriptions are dropping… Source: Leichtman Research Group
Facebook reaches more young people than free TV Source: Nielsen, January 2013
Netflix now has more US subscribers than HBO Source: Netflix, SNL Kagan
YouTube reaches more 18-34s than any cable network
Digital video revenue is no longer a joke… Source: BI Intelligence estimates, Company Filings
iTunes and Netflix already dwarf small cable networks Source: News Reports, Company Filings
YouTube is closing in on broadcast-network revenue Source: News Reports, BI Intelligence estimates, Company Filings
(Some) live sports are now being streamed Source: Ooyala 2014
TV now has to share attention with digital Source: Millward Brown, 2014
So, eyeballs are leaving TV
But, so far, TV money is hanging in there
TV still massive, digital video still a blip Source: Nielsen, IAB
So no worries in TV land?
It’s a generational shift — look what Millennials are doing Source: Ofcom
Money follows eyeballs… Source: Mary Meeker, IAB, eMarketer
So it’s only a matter of time.
What’s going on in digital?
Smartphone sales are still booming Source: IDC, Strategy Analytics, BI Intelligence estimates
Tablets have carved out a chunk of PC sales Source: Gartner, IDC, Strategy Analytics, Company Releases
“Phablets” are replacing small smartphones Source: BI Intelligence estimates
Nearly half of TVs are now connected Source: Leichtman Research Group, BI Intelligence estimates
“Wearables” are overhyped but growing Source: BI Intelligence estimates
Cars are increasingly connected Source: SBD, GSMA
300 million PCs are still sold each year Source: Gartner, IDC, BI Intelligence estimates
Should you be “mobile only?”
It’s a “multi-screen” world Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates
You should be “mobile, too.”
~60% of online devices are now smartphones or tablets Source: BI Intelligence estimates
We spend an hour a day on our smartphones Source: Experian Marketing Services, May 2013
We spend ? hour on tablet each time we use it Source: Google, August 2012
More than ? of Internet traffic is mobile Source: StatCounter, BI Intelligence estimates
Mobile has extended the digital day to 18/7 Source: Google Analytics, Business Insider
Each device has a different “prime time” Source: comScore, Telefonica, Macquarie Capital (USA), December 2011
Where are we in the mobile device cycle?
Developed mobile markets are nearing maturity Source: comScore
The action is now in China, India, and emerging markets Source: Mediacells via The Guardian
China is already twice the size of the US market Source: China Internet Network Information Center
Prices are dropping fast Source: BI Intelligence estimates
iPhone sales growth has slowed (iPhone 6 will help) Source: Company Filings
Chinese companies sell ~25% of smartphones in world Source: Canalys, IDC, Strategy Analytics, BI Intelligence, Company Reports
Global tablet growth has hit a wall Source: IDC, Strategy Analytics, BI Intelligence estimates
(iPad now experiencing “negative growth”) Source: Apple
Why have tablet sales cratered?
Long upgrade cycle Phablet cannibalization Need keyboard for serious input Price
What about the platform war?
We have a winner!
Apple is strong in the US, where it’s a two-horse race Source: comScore
But, globally, it’s an Android world
~85% of smartphones run Google’s Android Source: IDC, Strategy Analytics, BI Intelligence estimates
~65% of tablets run Android Source: BI Intelligence estimates
~70% of all new computing gadgets run Android Source: Gartner, IDC, Strategy Analytics, Company Filings, BI Intelligence estimates
Android used to lag Apple badly with app developers.
Android “fragmentation” problem is improving Source: Google
Android now more popular with developers than iOS Source: Developer Economics, Q3 2014
Android will soon overtake iOS in app revenue Source: Jana, App Annie, BI Intelligence estimates
Android is catching up to iOS in developer payouts Source: Jana, App Annie, BI Intelligence estimates
Android now generates more global ad traffic than iOS Source: Opera Mediaworks
The key digital media trends…
Mobile Social Native Video Programmatic
Most digital growth is now mobile Source: comScore, April 2014
Messaging apps are exploding Source: Company Statements, News Reports, BI Intelligence estimates
Social networks and sharing are exploding Source: BI Intelligence estimates based on data from company filings, comScore, Global Web Index, Totem and news reports
Mobile video is booming… Source: Cisco, 2013
Mobile video has enabled the rise of the YouTube stars Source: Company Filings 35 million viewers 8 million viewers 1 million viewers
Social and music are now mostly mobile Source: Company Filings
Mobile is driving all of Facebook’s growth Source: Company Filings
Mobile is now a third of eCommerce traffic Source: Monetate
PayPal powers $30 billion in mobile payments *PayPal counted a small portion of Braintree’s transaction volume as its own in the last 12 days of Q4 2013. Source: PayPal
Venmo is (finally) replacing friend-to-friend payments Source: PayPal, BI Intelligence
Ad growth is mobile, social, video, native, programmatic Source: BI Intelligence estimates based on data from BIA/Kelsey, IAB, IDC, and Magna Global Note: Formats overlap. Mobile includes all ad formats that appear on mobile.
Mobile is a “green field” Source: eMarketer
Social is booming Source: BI Intelligence estimates, BIA/Kelsey
“Display” ad spending is still respectable, but… Source: Company Filings, BI Intelligence estimates
Growth is shifting to “native”… Source: BI Intelligence estimates, IAB
And “programmatic” Source: BI Intelligence estimates, Magna Global, IDC
Google is still the digital advertising king Source: Company Filings Note: Based on GAAP revenue.
Google’s YouTube dominates digital video and video ads Source: Company Filings, BI Intelligence estimates
Google’s Chrome browser is crushing Firefox and IE Source: StatCounter
Google’s Android has peak-Windows-like market share Source: IDC, Strategy Analytics, BI Intelligence estimates
In Europe, Google has peak-Windows-like search share Source: StatCounter
Basically, Google is swallowing the world… Source: Google, 2014 Is An Estimate
(And people are noticing!) Source: StatCounter
(For Microsoft, DOJ attack was the beginning of the end) Source: StatCounter
Have Google and Facebook won?
Money follows eyeballs.
Search click growth is finally decelerating Source: Google
US desktop search queries are now shrinking Source: comScore Note: Explicit user initiated search queries only.
“No one uses Facebook anymore” — Gen Z-er Source: Piper Jaffray
Why do teens love Instagram?
What’s Tumblr for?
What about phone calls? Do people talk anymore?
Digital is the medium for the new generation. Digital will grow for decades.
So, what’s next?
Connected cars — we spend 1.2 hours a day in them Source: Bureau Of Labor Statistics
Wearables (someday) Source: BI Intelligence estimates
Smartwatches, like Apple Watch, should do okay Source: BI Intelligence estimates
Fitness bands will remain niche Source: NPD Group, BI Intelligence estimates; Annual Data From April Through March
“Internet of Things” — 20B connected devices by 2020 Source: BI Intelligence estimates
We’ll fill our houses with smart devices Source: ABI Research, TechNavio, Pike Research, BI Intelligence estimates
And companies will buy them by the billions Source: BI Intelligence estimates
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